Trust and relationship building in electronic commerce

Trust and relationshipbuilding in electroniccommerce

Panagiota PapadopoulouAndreas AndreouPanagiotis Kanellis andDrakoulis Martakos

Introduction

Internet commercialization has created anintense competitive environment forcingorganizations to extend traditional marketingpractices and focus on developing long-termrelationships with customers to ensure theirretention and loyalty Customer relationshipshave come to constitute an important new assetcategory as the accumulation of relationshipcapital increasingly provides a new foundationfor marketing and sales revenue (Tapscott et al2000) The cornerstone for a successful andlasting relationship with the customer is trustas it largely determines the customerrsquos futurebehavior and loyalty towards the business(Berry and Parasuraman 1991 Berry 1993)With loyalty becoming fast an economic andcompetitive necessity in e-commerce(Reichheld and Schefter 2000) trust itspredecessor is arguably the sine qua non of thedigital economy (Tapscott et al 2000)

For lsquolsquobricks-and-mortarrsquorsquo companiescustomer relationship building largely means aconcentrated marketing effort in establishing abrand name via controlled messages mediatedto customer segments at an often prohibitivecost The emphasis is placed on creating atrustworthy image of a company that deliversquality of products and services and offersconvenience to customers at a competitiveprice Customer trust depends on effectivebrand-oriented strategies based on broadcastpromotion and advertising techniques andparameters such as the firmrsquos size andreputation the salesforce and the physicallocation and appearance of a store A notablecharacteristic of all these means for developingtrust is their impersonal and unidirectionalnature which does not allow for a customerresponse to the message conveyed ndash the onlyexception being the customerrsquos contact with thecompanyrsquos salesperson enabling aninterpersonal direct communication

Although to a large extent traditionalprinciples for building trusting relationshipsmay be still valid in e-commerce theireffectiveness must be re-assessed The absenceof salespersons and the interpersonal face-to-face contact with the customer cannot be easilyreplaced in an electronic environment Inaddition customer expectations are higher in

The authors

Panagiota Papadopoulou is a Doctoral Candidate

Andreas Andreou is a Research Associate

Panagiotis Kanellis is a Research Fellow and

Drakoulis Martakos is an Assistant Professor all in the

Department of Informatics and Telecommunications at the

National and Kapodistrian University of Athens

Panepistimioupolis Athens Greece

Keywords

Trust Relationship marketing Virtual reality Agents

Abstract

In e-commerce trust becomes an essential prerequisite for

customer relationship building Drawn from established

theoretical work on trust and relationship marketing a

model is proposed aiming to help in highlighting the

differences between traditional and e-commerce and to

facilitate thinking as to how trust can be built in virtual

environments Conceptualized in the context of an electronic

servicescape the model helps to demonstrate how agent

and virtual reality technologies can facilitate the expres-

siveness required for the formation of trust through iterative

interaction with promises being made enabled and fulfilled

Electronic access

The research register for this journal is available at

httpwwwmcbupcomresearch_registers

The current issue and full text archive of this journal is

available at httpwwwemerald-librarycomft

322

Internet Research Electronic Networking Applications and Policy

Volume 11 Number 4 2001 pp 322plusmn332

MCB University Press ISSN 1066-2243

such an environment as they includeexpectations not only of the service encounterbut also of the underlying technology and thusbecome more difficult to manage Thereforein this emerging setting with which themajority of the customers are unfamiliar andreluctant building customer trust becomes atop priority

Recognizing the above as an issue thatdeserves our immediate attention we havedeveloped a model for trust formation andrelationship building in e-commerce Modelsare needed in order to leverage acquiredknowledge in such a way that it can betransferred easily to practice Focusing on thecapabilities of agent and virtual realitytechnologies our model seeks to achieve thisand can be used to inform the design ofelectronic environments that can support thecreation of lasting commercial relationships Itis demonstrated that the agent paradigm(Guttman et al 1998a Maes et al 1999 Ma1999) is ideally suited for developing such avirtual environment where agents can facilitatecustomer navigation and action contributing tothe creation of an illusory sense of a realisticcommercial context The personalizedautonomous adaptive and proactive nature ofagents provides for the high level of interactivityand expressiveness needed for an effective andfulfilling customer experience leading to atrusting relationship with the business

Despite the continuing research advancesregarding virtual environments and agentsvery few studies address their application ine-commerce Based on a set of principles andcriteria stemming from the model this paperdiscusses virtual reality and agent technologiesin terms of their appropriateness and forfacilitating trust building between the businessand the customer The structure of the paper isorganized as follows The next section offers abrief introduction to trust and identifies themain works that served as the theoreticalfoundation for the development of our modelwhilst the model itself is described in the sectionthat follows The paper concludes with adescription of an agent-mediated virtualenvironment for e-commerce emphasizing therole of agents and illustrating the potentialapplicability of the model

Trust in the literature

Trust is a highly complex and multi-dimensional phenomenon (Lewis and Weigert1985 Butler 1991 Barber 1983) Itsimportance to interpersonal and commercialrelationships is evidenced by the plethora ofresearch efforts within the various disciplinessuch as social psychology (Deutsch 1960Lindskold 1978 Lewicki and Bunker 1995)sociology (Lewis and Weigert 1985 Strub andPriest 1976) economics (Dasgupta 1988Williamson 1991) and marketing (Andersonand Weitz 1989 Dwyer et al 1987 Ganesan1994 Moorman et al 1992 1993) A largestream of literature has emphasized the role oftrust as being central to the success of customerrelationship building in all contexts ofrelational exchanges (Achrol 1991 Becker1960 Dwyer et al 1987 Morgan andHunt 1994)

There is currently an emerging body ofliterature related to trust in e-commerce Thishas been based to a greater or lesser extent tofindings and principles derived from traditionalresearch on trust However due to the newnessand complexity of this issue the extant studies inthis field address trust from different viewpointsand to different levels of analysis contributingonly partially and in a fragmented way to ourknowledge With trust research in e-commercebeing still in its infancy this poses a difficulty ingaining a clear understanding of its scale andscope A recent literature survey (Papadopoulouet al 2001) indicates that whilst there isevidence of a general congruence regarding theimportance of trust for e-commerce successmost of the current literature revolves around therole of trust for the adoption of e-commerce anddoes not offer an insight as to how trust mayactually be developed and maintained Themajority of studies emphasize the short-term andtransactional side of e-commerce failing toexamine the formation of trust as a process andas a means for long-term relationship building

With the objective to understand how trust isformed in commercial relational exchanges thattake place within electronic environments ourreview of the literature identified a number ofworks that provided the necessary theoreticalbackground to aid our endeavors towards fillingthis gap McKnight and Chervany (1996)

323

Trust and relationship building in electronic commerce

Panagiota Papadopoulou et al


Volume 11 Number 4 2001 322plusmn332

provided a typology of interrelated types of trustconstructs that helps to distinguish and capturethe conceptual meanings of trust In order tounderstand the nature of trust and itsdevelopment in commercial relationshipsDoney and Cannonrsquos (1997) work identifiedfive trust-building processes whilst Morganand Hunt (1994) contributed a set of trustdeterminant variables Building on Doney andCannonrsquos work we have defined another trustbuilding process the credibility process(Papadopoulou et al 2000a) associated withthe assessment of business integritydifferentiating it from the capability process(Table I)

The three facets of trust representing itsconstituents its determinants and itsdevelopment modes have been synthesized andtheoretically interrelated resulting in anintegrated model and a vertical understandingof how trust is formed in a relational exchangebetween two parties This model is presented inthe next section

A model for trust formation in e-commerce

In e-commerce the physical-to-virtual transferof commercial activity forces us to rethink theways traditional rules for building trust andloyalty can be applied Bitner (1995) hasidentified the functions of making enabling andkeeping promises for describing a serviceencounter and the associated relationshipbuilding between a business and the customer

in conventional commerce and has introducedthe notion of the servicescape (Bitner 1992) todescribe the physical environment in which theencounter takes place In a similar veinWanninger et al (1997) extended those ideas byconceptualizing their applicability within anlsquolsquoelectronicrsquorsquo servicescape Based on the aboveworks and realizing that emerging technologiescan provide the ground for innovation as far asmaking enabling and keeping promises areconcerned (see Table II) we suggest that Websites should be transformed to customer-centrice-servicescapes offering a digital experience thatcan contribute towards the development of anindelible relationship between the business andthe customer (Papadopoulou et al 2000b)

Therefore the model that is presented in thissection should be conceptualized in relation tosuch an e-servicescape aiming to serve as aguide for examining the applicability andeffectiveness of a series of well-proven rules andprinciples whilst helping us in the process todelve away from the purely transactional-basedflavor that the majority of Web sites projecttoday

A customer seeking to engage in acommercial relationship with a business hasinitially a positive predisposition which is theresult of the combination of three constructs(1) disposition to trust(2) institution-based trust and(3) initial trusting beliefs

The customer has a general propensity to trustothers stemming from personality and cultural

Table I Trust constructs precursors and building processes

Trust constructs(McKnight and Chervany 1996)

Precursors of trust(Morgan and Hunt 1994)

Trust-building processes(Doney and Cannon 1997)

Dispositional trust Shared values Intentionality

Institution-based trust Communication Capability

Trusting beliefs Opportunistic behavior Prediction

Benevolence Transference

Competence Calculative

HonestyIntegrity Credibility (Papadopoulou et al 2000a)

PredictabilityConfidence in beliefsa

Trusting intentionTrusting behavior

Note a` Confidence in beliefsrsquorsquo is not a separate trust construct like the other points in this column but refers to theconfidence related to the trusting beliefs construct

324





factors (disposition to trust) enhanced by theperceived propriety of the conditions(institution-based trust) In addition thecustomer has initial trusting beliefs that havebeen formed through the transference processwith information conveyed from third partiesregarding the business reputation includinginformation from third party recognitionbodies

The combination of these three constructsresults in the customer having a positiveattitude and being open to any promises madeby the business aiming to augment his trustingintention towards any service or productofferings Provided that the customer isinterested in the promise made he expresses awillingness to depend on the business atrusting intention and anticipates the promiseto be enabled Enabling the promise within thee-servicescape allows a trusting intention to bemanifested in an acceptance of the risk inherentin the situation and eventual dependence on thepromise resulting in a trusting behavior Thenkeeping the promise has a positive impact onthe customerrsquos perceptions and future

expectations regarding the quality of theinteraction with the business through thee-servicescape This point when all stages ofpromise fulfillment have been completedrepresents what Carlzon (1987) calls lsquolsquomomentof truthrsquorsquo The customer evaluates the serviceencounter and compares the service heexpected according to the promise that wasinitially made to him with the service he actuallyreceived upon the fulfillment of the promiseService quality ie the degree to which theperceived service meets customer expectations(Gronroos 1984 Lewis and Booms 1983Parasuraman et al 1985) will determinecustomer satisfaction and will be reflected in thecustomerrsquos trusting beliefs in the businessThese trusting beliefs will now substitute for theaforementioned three prerequisites that define apositive predisposition and will serve as thelaunch pad for future interaction with thebusiness Any such interaction within thisenvironment will further strengthen the trustingbeliefs resulting in a sustained relationshipbetween the business and the customer via therepeated use of the e-servicescape (Figure 1)

Table II Making enabling and keeping promises differences between physical and virtual commerce

Physical commercial environment E-servicescape

Make a promise

Broadcast advertising Interactive advertising with agents

Message and target audience defined before presentation Message is rendered with real-time segmentation

according to customer during interaction

Gap between message exposure and customer response Message exposure and customer response occur

simultaneously in real-time

One-way one-to-many strategy Interactive personalized communication

Enable a promise

Limited search and recommendations depending on

salesperson

Full extensive search and recommendations driven by

customer

Subjective presentation Objective presentation

Touch and feel product Preview and experience 3D virtual product

Interpersonal communication and physical contact with

salesperson Personalized dialogue with agents

Order is placed separately in time and space from made

promise Order is placed at same time and space with promise made

Keep a promise

Conventional payment Online payment

Physical delivery Online or physical delivery

Post-sales service separated from purchase Post-sales service (inc delivery tracking) at time and space

of purchase

325





The development of trusting beliefs isaccomplished by the activation of the trust-building processes during the different stages ofpromise fulfillment (Figure 2) When a promiseis made within the e-servicescape theintentionality process is initiated to help thecustomer determine the business motives andintentions influencing his or her trusting beliefin the business benevolence Enabling thepromise invokes the capability process anassessment of the business ability to realize itspromise which affects the customerrsquos trustingbelief in the business competence Keeping thepromise triggers the credibility process by whichthe customer evaluates the extent to which the

business has actually delivered on its promise anddevelops a trusting belief in the business integrityThe entire interaction with thee-servicescape results in the activation of the restof the trust building processes Relying on theprediction process the customer makes inferencesabout the business consistency in delivering thepromises it makes enhancing his or her trustingbelief in the business predictability Finally withthe calculative process the customer performs acostbenefit-like analysis of a number of scenarioswhere the business may act in an untrustworthymanner towards him or her so as to eliminate anysuch suspicions and increase confidence in his orher beliefs

Figure 1 Trust formation through promise fulfillment within the e-servicescape

Figure 2 Activation of trust-building processes within the e-servicescape

326





Trust evolves over time as the customer engagesin repeated interactions with promises beingfulfilled within the e-servicescape Each time apromise is made enabled and kept it isevaluated with the intentionality the capabilityand the credibility process confirming thecustomerrsquos trusting beliefs in the businessbenevolence competence and credibility Thelevel of trust is also related to the experience thatthe customer gains within the e-servicescapeCustomers perceive the length of the relationalexchange as an investment which is made bythe business and is valued highly enough todeter it from acting opportunistically Thenumber of business-customer contacts alsoprovides a basis for a thorough interpretation ofthe business behavior which enables thecustomer to predict subsequent interaction

In the beginning of this section wehighlighted a number of differences betweentraditional and e-commerce regarding thestages of make enable and keep promises Wealso stressed that the real value of the modelrests in the way it helps to facilitate thinkingabout the potential effectiveness of applyingtraditional rules and principles in a virtualenvironment It forces us to revisit themidentifying in the process novel approaches forthe formation of trust that are only madepossible via the application of new technologiesOne such example is the use of customercommunities as they can provide support forthe three precursors of trust posited by Morganand Hunt (1994) ie shared valuescommunication and opportunistic behaviorenabling the transference intentionality andcalculative trust-building processes Customersfor example can share their views andexperiences of specific products and servicesand as a result learn from each other andformulate trusting beliefs using the transferenceprocess This also offers the business a meansfor learning about their customersrsquo opinions forautomating referrals and for acquiring newcustomers at a low cost The emotionalattachment that a customer may develop for thecommunity he or she belongs to enhancesperceptions about the business trustworthinessas shared values enable inferences of benevolentintentions (Macneil 1980) activating theintentionality process In addition customerssee the provision of customer communities by

the business and their participation in them as amutual relationship investment Driven by thecalculative process they consider a businessopportunistic behavior to be unlikely thusincreasing their emotional security about theirtrusting beliefs

It follows that a customer-centrice-servicescape should not only be restricted instrictly commercial activities but should alsoinclude customer communities in order to beeffective in its attempts to develop long-termcustomer relationships Apart from fulfillingpromises associated with the service encountera business should also understand the socialaspect of the commercial transaction andenable contact between the customers a valueenhancement for both the business and thecustomer to promote trust and relationshipbuilding In this direction the business shouldact in the customerrsquos interest by proactivelycreating and offering customer communities aspart of the e-servicescape so as to satisfy anycustomer needs for communication socializingand self-expression that can emerge from acontact with the business

Trust formation within an agent-mediatedvirtual servicescape

In its core trust formation is a cyclic interactiveprocess intertwining promises and trust buildingprocesses to develop a customerrsquos trusting beliefsintention and behavior towards the businessMoving on to an electronic environment andconsidering the powerful features of agents andvirtual reality we argue that these technologiescan offer the contextual expressiveness forenabling trust formation as specified in the modelpresented in the previous section

Agents are software entities that act on behalfof the user and offer services in an autonomousproactive adaptive and continuous fashion(Green et al 1997) They are autonomousbecause they control their own actions pro-active because they are after certain goalsadaptive because they sense changes in theenvironment and act accordingly andcontinuous because they execute continuouslyAgents may possess additional properties suchas the communicative property that enablesthem to communicate with other agents the

327





mobile property that allows them to travelaround a network in order to do their work thelearning property that helps them adaptaccording to previous experience and thebelievable property that makes them appearbelievable to users (Lange 1998) The servicesoffered by agents include searching comparinglearning negotiating and collaborating Severaldifferent types of agents have been identifiedcollaborative agents interface agents mobileagents information agents reactive agentssmart agents and hybrid agents (Jonkheer andJansen 1999) which are to a greater or lesserextent used in electronic commerce (Do et al1996 Ma 1999)

We posit that the customer experiencecurrently provided by agent technology in e-commerce can be further enhanced with the useof virtual reality that helps humans to visualizemanipulate and interact with computers andextremely complex data (Aukstakalnis andBlatner 1992) Visualization involves thegeneration of visual auditory and other sensualoutput from the computer to the user of thevirtual world This world may be a complex 3Dmodel a scientific simulation or a view into adatabase (Isdale 1993) The user can interactwith the world and its components directlymanipulate movable objects navigate inside theprovided environment and chat with otherinhabitants of the world These inhabitants canbe either computer generated characters orartificial impersonations of human participantsand are visualized as avatars Avatars can alsobe programmed to perform gestures expressfeelings and act as humans (Roehl 1995)Many virtual reality applications contain worldsthat look and behave the way that real life doeswhile others incorporate features thatdifferentiate them from anything we normallyexperience In this way virtual reality not onlyempowers the creation of ideal versions of ourown world but it provides for the alleviation ofreal world problems and the breaking of spatialand temporal bonds that exist in physical life(Horberg 1995)

We believe that the lsquolsquorightrsquorsquo blend and smartuse of these technologies can facilitate thedevelopment of a trust-oriented e-commerceservicescape as an agent-mediated virtualenvironment enabling customer interactionwith business promises As Cassel (2000)

claims since humans display a tendency tointeract with computers following social normsof human behavior interfaces should beimplemented with embodied conversationalagents to become anthropomorphized withproperties of human face-to-face conversationOur description will revolve around the role ofagents and virtual reality in providing an insightas to how environments like these can functionfocusing on the part of making and enablingpromises Thus we suggest that ane-servicescape should be designed as a three-dimensional virtual world depicting a shoppingmall comprising of several virtual stores Thisvirtual environment will be populated byanthropomorphized avatars representingcustomers and salespersons (Figure 3)

A customer will be able to visit the virtualservicescape in the form of an avatar and engagein shopping activities by interacting with thesalesperson avatars which will be implemented asagents Whilst salespersons will be implementedas anthropomorphic agents the agentimplementation for customer avatars is notessential although it could be considered as anoption for an advanced type of customerinteraction within the e-servicescape in thefuture Salesperson agents will be divided intotwo categories mall agents and business agentsdepending on their role in the e-servicescapeMall agents will welcome and greet the customervisiting the virtual mall and guide him or her to

Figure 3 An agent-populated virtual servicescape

328





the stores They will be able to perform a searchand recommend the store(s) with the products orservices that are best suited to the customerneeds Business agents will act as surrogates of acompanyrsquos store salespersons serving thecustomer that visits a store by following thesuggestion of the mall agent and offeringassistance regarding the products or servicesavailable In this view the design of the e-servicescape as a shopping mall of multiple storeswhere customers businesses and salespersonagents are visualized allows for customerinteraction within the e-servicescape at twodistinct levels depicting the functions of makingand enabling promises At the first level promisesare made through the mall agents while at thesecond level promises are enabled by the businessagents in the virtual stores Mall agents willdemonstrate the business benevolent intentionand motivation to act in the customerrsquos interest inorder to force the creation of a customerrsquostrusting intention towards the business and atrusting belief in the business benevolencethrough the activation of the intentionalityprocess Business agents will show the businesscompetence to meet the expectations raised bythe promise made earlier by the mall agents inorder to encourage the manifestation of thetrusting intention to a trusting behavior and builda trusting belief in the business competencethrough the capability process For keeping thepromise the e-servicescape should also offer asolid infrastructure for the delivery of digital orphysical goods and services which should befulfilled exactly as it was originally made to thecustomer

Based on the consumer buying behavior(CBB) model that identifies six stages withinthe buying process (Guttman et al 1998b) weenvisage the role of a mall agent to be associatedwith the stages of need identification andmerchant brokering and part of the productbrokering of the buying process Businessagents will provide support for part of theproduct brokering and also for the negotiationstage It must be noted that at this stage ourconceptualization of the agentrsquos role in thee-servicescape does not involve paymentdelivery and post-purchase service whichcorrespond to the function of keeping apromise but is limited to making and enablingcustomer promises

The role of agents

In an electronic environment mall agents will beresponsible for making promises to thecustomer on behalf of the companies that areregistered members of a specific e-servicescapeThe content of the promise should be clearexplicit and carefully specified andcommunicated as it will determine customerexpectations from the service encounter Thistype of agents will collect information from thevarious companies and proactively presentselected advertising messages to the customerregarding business offerings based on thecustomer profile The customer will be able torequest information about the advertised offersand be directed by the mall agent to the virtualstore of the business making a particular offerIn addition the customer will be able to declarehis interest in a product or service to an agent ofthis type regardless of those advertised Themall agent will perform a search based on thecustomer request and characteristics derivedfrom previous visits (Venners 1997) In case ofa new customer the mall agent will ask thecustomer personal information to create aprofile with his or her needs and preferencesFurthermore customers will be able to watchand follow the mall agent traveling inside thevirtual environment completing its search taskIn order to make possible the visualization ofthe agentrsquos searching process and the depictionof the state and percentage of completeness ofan agentrsquos task all databases available to agentsshould be mapped to three-dimensionalcoordinates These coordinates reflect thelocation of a business database within thevirtual environment and along with the agentrsquosinitial position are fed to an interpolationmodule that is responsible for moving the agentinside the virtual environment

The promise will be made andcommunicated to the customer by the mallagent presenting the results of the search tothe customer and recommending the bestoption that fits the search criteria and thecustomer needs Mall agents should deliver anobjective and unbiased presentation of theirfindings in order to demonstrate thebenevolent intentions of the business that willbe assessed to determine the customerrsquostrusting belief in the business benevolence

329





This can be implemented by using athoroughly designed and specified rankingsystem that will also take into account theuserrsquos personal preferences The presentationof an agentrsquos findings can be further enhancedby providing a three-dimensional visualizationof each finding which the user can manipulateand interact with In order to make suchvisualization possible organizations andbusinesses should be responsible for providingaccess to three-dimensional objects associatedwith a specific finding The objects usedduring the presentation of the search resultsshould be small in size (for measuring the sizeof an object the system could either use thesize in kilobytes or the polygon count) in orderto decrease network traffic load A full-featured version of the object should only beprovided whenever the customer decides tovisit the corresponding shop Mall agentsshould also provide a complete list ofreferences and places searched as well asdirect access to the primary information Thiscapability will give users the opportunity toextend the search themselves and will renderthe agents and the businesses represented inthe e-servicescape trustworthy furtheraffecting the customerrsquos trusting belief inbenevolence When the promise has beenmade the customer will be guided by the mallagent to the store of the business offering theselected product or service displaying atrusting intention towards this business

Business agents will be responsible forenabling promises to the customer on behalfof a specific business that is virtuallyrepresented in the e-servicescape by a store ofthe shopping mall When a customer arrives toa virtual store driven by the mall agent thebusiness agent serving as the businesssalesperson will take over from the mall agentand assume responsibility for offering serviceto the customer This type of agent willprovide up-to-date detailed information onproducts and services available from theparticular store and will allow customers topreview and experience them before purchaseaiming to impel customers towards trustingbehavior In addition they will help thecustomer with the ordering process whichshould include alternative payment methodsand provide security and customer privacy so

as to eliminate any concerns that prevent himor her moving from the trusting intentionstage to that of a trusting behavior towards thebusiness

Business agents will present a productrsquosfeatures and way of usage in a more explanatoryand thorough description than the onepreviously given by the mall agent by havingaccess to complete and detailed data onproducts and services offered This presentationwill be made in a personalized fashiondepending on the level of customerrsquos knowledgeand experience with the specific type of productor service Leveraging the benefits that stemfrom the visual representation of productswithin the virtual environment customers willbe able to view a product from all possibleangles fully interact with it get accustomed toall of its capabilities and learn how to use itbefore even buying it Furthermore dependingon the product in question and on customerrsquosproperties businesses should implementdifferent sales policies via their agents Theyshould also propose different paymentalternatives that suit customer needs andprovide security options for the ordering andpayment of goods Enabling the promise in thismanner will positively influence the customerrsquostrusting belief in the business competencethrough the activation of the capability processand will incite the customer to act in a trustingbehavior

Provided that they meet certain criteria thepresence of mall and business agents in suchenvironments can greatly enhance customerexperience Both types of agents should bear auser-friendly and intuitive interface allowingthe novice users to realize and manage theirsearches in a simple yet satisfactory manner Atthe same time agents should also allow for fullcustomization so that they can be furtherenhanced functionally by expert users Thiscapability can be implemented by eitherproviding more specific and detailed options orby exposing the agentrsquos object model andallowing programming using a scriptinglanguage (Lange et al 1999) Moreover theprovision of an additional agent ability tounderstand natural language questions as well asthe usage of speech recognition technologiescould further facilitate interaction enriching thecustomer experience within the e-servicescape

330





Another important feature that should beconsidered is that of learning Agents should beable to learn usersrsquo behavior and preferencesproviding them with alternatives during theirsearches in accordance with previousexperience The output of this learning processconsists of recommendations and suggestionsthat originate from the agentrsquos accumulatedknowledge and should be presented to the userin a non-stereotypical and perhaps evenunexpected fashion Such behavior will increasethe customerrsquos sense of familiarity and comfortwith agents promoting the formation of trustwithin the e-servicescape

Conclusions

In this paper we have presented a model forthe formation of trust in e-commerceSynthesizing and interrelating concepts fromtrust and relationship marketing the modelhas been conceptualized in the context of ane-servicescape

The model seeks to facilitate an examinationof the applicability of conventional businessrules and principles for trust and relationshipbuilding in e-commerce In order to illustrate itsuse the paper described an agent-mediatedvirtual servicescape showing how the featuresof agent and virtual reality technologies can beeffectively applied to provide an e-commerceenvironment enabling the formation of trustUndoubtedly the implementation of suchenvironments is not a simple task There areseveral issues that have to be taken intoconsideration such as bandwidth availabilitysecurity and the lack of a globally acceptedmessaging language between agents

However it is our belief that thesetechnologies can be successfully leveraged forthe development of customer-centric e-commerce environments Several companiessuch as British Telecom and Coca-Cola (WallStreet Journal 2001) have already startedintroducing the use of avatars and virtualreality in their commercial Web sites so as toenrich the customerrsquos experience Thissuffices as proof of the commercial viabilityand future potential that such servicescapesmay hold

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332





such an environment as they includeexpectations not only of the service encounterbut also of the underlying technology and thusbecome more difficult to manage Thereforein this emerging setting with which themajority of the customers are unfamiliar andreluctant building customer trust becomes atop priority

Recognizing the above as an issue thatdeserves our immediate attention we havedeveloped a model for trust formation andrelationship building in e-commerce Modelsare needed in order to leverage acquiredknowledge in such a way that it can betransferred easily to practice Focusing on thecapabilities of agent and virtual realitytechnologies our model seeks to achieve thisand can be used to inform the design ofelectronic environments that can support thecreation of lasting commercial relationships Itis demonstrated that the agent paradigm(Guttman et al 1998a Maes et al 1999 Ma1999) is ideally suited for developing such avirtual environment where agents can facilitatecustomer navigation and action contributing tothe creation of an illusory sense of a realisticcommercial context The personalizedautonomous adaptive and proactive nature ofagents provides for the high level of interactivityand expressiveness needed for an effective andfulfilling customer experience leading to atrusting relationship with the business

Despite the continuing research advancesregarding virtual environments and agentsvery few studies address their application ine-commerce Based on a set of principles andcriteria stemming from the model this paperdiscusses virtual reality and agent technologiesin terms of their appropriateness and forfacilitating trust building between the businessand the customer The structure of the paper isorganized as follows The next section offers abrief introduction to trust and identifies themain works that served as the theoreticalfoundation for the development of our modelwhilst the model itself is described in the sectionthat follows The paper concludes with adescription of an agent-mediated virtualenvironment for e-commerce emphasizing therole of agents and illustrating the potentialapplicability of the model

Trust in the literature

Trust is a highly complex and multi-dimensional phenomenon (Lewis and Weigert1985 Butler 1991 Barber 1983) Itsimportance to interpersonal and commercialrelationships is evidenced by the plethora ofresearch efforts within the various disciplinessuch as social psychology (Deutsch 1960Lindskold 1978 Lewicki and Bunker 1995)sociology (Lewis and Weigert 1985 Strub andPriest 1976) economics (Dasgupta 1988Williamson 1991) and marketing (Andersonand Weitz 1989 Dwyer et al 1987 Ganesan1994 Moorman et al 1992 1993) A largestream of literature has emphasized the role oftrust as being central to the success of customerrelationship building in all contexts ofrelational exchanges (Achrol 1991 Becker1960 Dwyer et al 1987 Morgan andHunt 1994)

There is currently an emerging body ofliterature related to trust in e-commerce Thishas been based to a greater or lesser extent tofindings and principles derived from traditionalresearch on trust However due to the newnessand complexity of this issue the extant studies inthis field address trust from different viewpointsand to different levels of analysis contributingonly partially and in a fragmented way to ourknowledge With trust research in e-commercebeing still in its infancy this poses a difficulty ingaining a clear understanding of its scale andscope A recent literature survey (Papadopoulouet al 2001) indicates that whilst there isevidence of a general congruence regarding theimportance of trust for e-commerce successmost of the current literature revolves around therole of trust for the adoption of e-commerce anddoes not offer an insight as to how trust mayactually be developed and maintained Themajority of studies emphasize the short-term andtransactional side of e-commerce failing toexamine the formation of trust as a process andas a means for long-term relationship building

With the objective to understand how trust isformed in commercial relational exchanges thattake place within electronic environments ourreview of the literature identified a number ofworks that provided the necessary theoreticalbackground to aid our endeavors towards fillingthis gap McKnight and Chervany (1996)

323


























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Make a promise







Enable a promise


salesperson


customer







Keep a promise




of purchase

325









326












327











328







The role of agents



329










330






Conclusions




References




























331





























































332


























324










Make a promise







Enable a promise


salesperson


customer







Keep a promise




of purchase

325









326












327











328







The role of agents



329










330






Conclusions




References




























331





























































332










Make a promise







Enable a promise


salesperson


customer







Keep a promise




of purchase

325









326












327











328







The role of agents



329










330






Conclusions




References




























331





























































332









326












327











328







The role of agents



329










330






Conclusions




References




























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328







The role of agents



329










330






Conclusions




References




























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328







The role of agents



329










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Conclusions




References




























331





























































332







The role of agents



329










330






Conclusions




References




























331





























































332










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Conclusions




References




























331





























































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Conclusions




References




























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Trust and relationship building in electronic commerce

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Transcript of Trust and relationship building in electronic commerce